Later this month we will see the first of the state ETFs listed. One will be for Texas and the other from Oklahoma.You can look at the index components at the AMEX website (Texas and Oklahoma). The Texas fund will be some sort of proxy for domestic large cap and the Oklahoma fund will either be a proxy for mid or small cap. They will both be heavy in energy and Texas looks like it has a lot of tech but I have not done a sector breakdown yet nor was I able to find one.
I will probably do a write up on them for theStreet.com but I have to say I will be shocked if anyone cares about these funds. This is not to say the funds will be flawed or defective just not relevant. I have not read any marketing material about the funds but I presume they are targeted to some audience but that audience would likely be very small and it's not like 100% of that audience is going to buy the fund.
In the past people from the various fund companies have tried to convince me of the utility of some funds and often there simply isn't any despite the story they are telling. I am quite certain that will be the case here.
Sorry for the short post, a very hectic day coming.
14 comments:
ETFs Gone Wild.
T
kind of the opposite of wild eh? more like dull to the point of being immdeiately useless.
a Norwegian Fishery ETF would be ETFs Gone Wild XD
This makes no sense to me. Where a US company headquarters is just not important to me.
The Delaware ETF is gonna have a ton of companies in it. hahah
i think that one already exists, the ticker is SPY
just a joke
The only reason I can think of for a state ETF being useful would be to avoid state income tax on the distributions; this assumes the state has an income tax (TX does not) and the state is willing to make this concession to the ETF (like with state municipal bonds and funds).
JCarr
gee, what will happen to the Texas ETF when the state secedes?
Bluesman
Anon 9:20 - there you go. competition for state muni bond funds. heh.
We were going to have an etf here in Michigan, but, well...
9 comments on a dumb topic. Roger your blog is doing very well.
Still I would like to see you get back to more substantial posts
anon 12:37 sorry you don't feel like you are getting your money's worth.
Agree that State ETF's won't be very popular.
On the other day's discussion about US default, if the Congress raises the debt limit,default is more likely. Our whole economic pie is in the hands of Congress. If they cut spending to reflect revenues, we will be OK.If they continue their previous behavior, we end up in default.
Inflation is virtually impossible
with this much unemployment AND
no pricing power for corporations
or small businesses.
The best we can hope for is Congress to wake up!!!
The Oklahoma fund has possibilities as a pipeline proxy.
I don't like MLPs because of the K-1 and possible multiple state income tax issues. Current MLP funds are either an ETN (AMJ) or leveraged, expensive CEFs.
This Oklahoma index appears to be about 70+% in energy and most of it's pipeline companies using corporations instead of the MLPs in many cases. By law mutual funds can't hold more than 25% in partnerships and this fund comes in at ~23%. And no leverage which is good. I wonder what the dividends are an whether they do return of capital because of pipeline depreciation.
Paul
What's next, ETFs based on the color of a company's logo? Syllables in their name? Maybe the first letter in their name?
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